Right as the opening auction wrapped up, optical module stocks surged to the forefront of market gains. ZJ INNOLIGHT opened at 838.61 yuan, climbing 3.02%; Eoptolink Technology rose 3.10%; Tianfu Communication and T&S Communications both opened roughly 3% higher; and upstream optical chip player Yuanjie Semiconductor advanced 2.25%. The Shanghai Composite Index opened up 0.32%, while the ChiNext Index gained 1.21%.

Last Friday, U.S. stocks were pressured by non-farm payroll data, with the Nasdaq closing down 0.29%. However, the Philadelphia Semiconductor Index bucked the trend, surging over 3%. Coherent jumped 6%, Marvell Technology climbed 7%, and the memory chain was even hotter, with SanDisk soaring nearly 12% and SK Hynix's ADRs rising over 8%. With U.S. markets closed Monday for Labor Day, the baton passed to Asia-Pacific. Japan's Nikkei 225 surged over 2% intraday to breach the 66,000-point level, with SoftBank, which holds a stake in OpenAI, jumping nearly 7%. South Korea's KOSPI approached the 7,000-point mark, as SK Hynix and Samsung Electronics both advanced more than 4%.

On the news front, GPT-6 Astra was released last week and rolled out widely to paid users over the weekend. OpenAI President Greg Brockman welcomed the arrival of the AGI era, noting the model scored near-perfect on the advanced FrontierMath benchmark while cutting the cost of programming tasks by 57% compared to its predecessor. A Goldman Sachs trading desk head called it the model the AI bull market had been waiting for, shifting industry focus from cost reduction back to capability leaps and prompting a fresh extrapolation of the compute demand curve.

On the morning of September 7, Goldman Sachs published a deep-dive report on ZJ INNOLIGHT, initiating coverage of its H-shares with a Buy rating and a target price of HK$3,267, while reiterating a Buy on its A-shares with a target of 2,645 yuan. Based on the report's reference price of 814 yuan, this implies potential upside of 224.9%. Goldman Sachs also raised its net profit forecasts for ZJ INNOLIGHT for 2026 and 2027 above consensus estimates.

Extending the timeline to 2028, Goldman projects the global optical module market will grow from US$37.6 billion in 2025 to US$131.4 billion by 2027, reaching US$148.5 billion by 2028. Products of 800G and above are expected to surge from approximately US$45 billion in 2026 to US$130 billion by 2028. On the company's income statement, revenue is projected to climb from 38.2 billion yuan in 2025 to 417.8 billion yuan by 2028, with net profit rising from 10.8 billion yuan to 137.1 billion yuan, and gross margins expanding from 42% to near 50%.

The basis for these upward revisions lies in the generational shift. While GB200 still predominantly uses 400G and 800G, GB300 has already migrated toward 800G and 1.6T, and the Rubin and Rubin Ultra platforms push configurations to 1.6T and 3.2T. The product transition is happening faster than the market previously anticipated, steepening the slope of shipment forecasts. Silicon photonics penetration is now a standalone focus, rising from approximately 6% in 2025 to 18% by 2028, with even higher adoption in high-speed products—around 60% for 800G and roughly 80% for 1.6T and 3.2T. Laser usage is being compressed, with the laser content value in a 1.6T silicon photonics module at about US$15-20, compared to approximately US$160 for an EML-based solution.

For ZJ INNOLIGHT, the growth story now extends beyond pluggable modules into the scale-up domain. Goldman estimates its optical engines, NPO, CPO, FAU, ELS, and optical switch businesses will grow from almost nothing in 2026 to 70.8 billion yuan by 2028, representing about 17% of total revenue. The incremental market beyond pluggable modules is now on the table. As for whether CPO might cannibalize pluggable modules, Goldman's view is that the space remains large enough, and the company has positioned itself across both technology paths.

GPT-6 Astra has shifted the industry's focus from cost savings back to capability enhancement, and Goldman has pulled forward its timeline for 1.6T volume ramp-up. Together, these forces drive the outward extrapolation of the compute demand curve. While rising rate hike expectations may cap valuations, capital in the industry sector is currently making a more decisive choice. The 2,645 yuan target implies 224.9% upside, but realizing it depends on quarterly shipment numbers—the cadence is what deserves closer attention than the price target itself.